Derek Achong

Se­nior Re­porter

derek.achong@guardian.co.tt

The boards of State en­ter­pris­es are not “rub­ber stamps” for the gov­ern­ment that ap­point­ed them.

High Court Judge Ricky Rahim made the state­ment yes­ter­day, as he up­held a land­mark breach of fidu­cia­ry du­ty case against for­mer Sports Com­pa­ny of T&T Lim­it­ed (SporTT) CEO John Mol­len­thiel and his board mem­bers, over their role in fa­cil­i­tat­ing a failed $34 mil­lion con­tract for the con­tro­ver­sial and now-de­funct Life Sport pro­gramme.

Jus­tice Rahim found that Mol­len­thiel and the for­mer board mem­bers, led by chair­man Se­bas­t­ian Padding­ton, did not act in the com­pa­ny’s best in­ter­est when they ap­proved the con­tract with eBeam In­ter­act Lim­it­ed on the in­struc­tions of Min­istry of Sport of­fi­cials in De­cem­ber 2012. He found that they should have raised con­cerns over eBeam’s abil­i­ty to per­form its con­trac­tu­al oblig­a­tions, based on a mul­ti­tude of er­rors in its pro­pos­al for the pro­gramme, in­stead of sim­ply seek­ing to im­ple­ment the min­istry’s di­rec­tive.

“On the ev­i­dence be­fore the court, none of the di­rec­tors raised gen­uine ques­tions in re­la­tion to the in­for­ma­tion that was pro­vid­ed to them and sought to be sat­is­fied be­fore mak­ing an in­formed de­ci­sion,” Jus­tice Rahim said, as he not­ed the de­ci­sion was tak­en with “much haste” as it was “pro­pelled” by Mol­len­thiel.

“The de­ci­sion re­quired the ex­er­cise of care and dili­gence of a rea­son­ably pru­dent per­son and on all counts on the ev­i­dence, the de­fen­dants failed at do­ing so,” he added.

Jus­tice Rahim al­so re­ject­ed claims from the for­mer board that seek­ing to raise is­sues with the min­istry’s in­struc­tions would have pit­ted them against the then Peo­ple’s Part­ner­ship gov­ern­ment.

“In fact, the ad­her­ence to the du­ty would have had the con­trary ef­fect and would have act­ed as a check and bal­ance in this case where the Min­istry of Sport had, in re­al terms, in fact, made the de­ci­sion to se­lect the ser­vice provider,” he said.

While SporTT was seek­ing sig­nif­i­cant com­pen­sa­tion based on the val­ue of the con­tract, Jus­tice Rahim on­ly or­dered each of the di­rec­tors and Mol­len­thiel to pay $40,000, a to­tal of $560,000, in nom­i­nal dam­ages for their breach.

Jus­tice Rahim ruled that SporTT suf­fered a loss as a re­sult of the failed con­tract, but not­ed that such was dif­fi­cult to quan­ti­fy as eBeam pro­vid­ed some ser­vices. He al­so not­ed that the gov­ern­ment guar­an­teed and re­paid the loan ob­tained by the SporTT to pay eBeam for the con­tract.

“In the court’s view, the los­er in the en­tire trans­ac­tion was in a re­al sense not the claimant but the gov­ern­ment of T&T and by ex­ten­sion the peo­ple of T&T who were to ben­e­fit from the pro­gramme,” Jus­tice Rahim said.

“The re­spon­si­bil­i­ty for that loss must, how­ev­er, fall at the feet of the de­fen­dants whose breach of du­ty re­sult­ed in the loss to both the claimant and the GORTT through the claimant,” he added.

Jus­tice Rahim al­so ex­pressed dis­ap­point­ment that the board’s ac­tions caused the fail­ure of that as­pect of the Life­S­port pro­gramme.

“Through their ac­tions, the board per­mit­ted a pro­gramme which had the po­ten­tial to rad­i­cal­ly change the lives of the youths of this coun­try to de­gen­er­ate in­to a de­ba­cle,” he said.

The law­suit cen­tred around the con­tract with eBeam to pro­vide the lit­er­a­cy, nu­mer­a­cy and tech­nol­o­gy com­po­nent of the Life­S­port pro­gramme, which was in­tend­ed to tar­get at-risk youths be­tween 16 and 25 years.

The Min­istry of Sport di­rect­ed the board to award the con­tract to eBeam through a sole se­lect ten­der, in­stead of through an open pro­cure­ment process and it com­plied.

eBeam was paid in two tranch­es but the con­tract was even­tu­al­ly ter­mi­nat­ed based on its fail­ure to meet its oblig­a­tions.

The oth­er de­fen­dants in the case were Chela Lam­see-Ebanks, Reynold Bala, Nor­ris Blanc, Nisa Dass, Dr Anyl Gopeesingh, Cheemat­tee Mar­tin, Matthew Quam­i­na, An­nan Ram­nanans­ingh, Kent Sam­lal, Harnar­ine Seer­am Singh, and Mil­ton Si­boo.

Singh died while the case was still pend­ing and a rel­a­tive was sub­sti­tut­ed to rep­re­sent his es­tate. Sam­lal, an at­tor­ney, was most re­cent­ly ap­point­ed to the three-mem­ber tri­bunal that will hear chal­lenges to de­ten­tion or­ders is­sued un­der the on­go­ing State of Emer­gency (SoE).

In de­fence of the law­suit, Khayyam claimed she was aboard when the de­ci­sion to award the con­tract was first ap­proved by her fel­low board mem­bers through a “round robin” process.

Blanc and Quam­i­na al­so claimed they had raised con­cerns over eBeam’s suit­abil­i­ty, while Mar­tin claimed she ini­tial­ly re­fused to vote on the is­sue, as she was giv­en too short no­tice.

Jus­tice Rahim re­ject­ed their claims, as he not­ed that they even­tu­al­ly rat­i­fied the de­ci­sion months lat­er de­spite their ini­tial con­cerns or ab­sence.

“There would have been noth­ing which pre­vent­ed the board from re­vert­ing to the Min­istry of Sport in re­la­tion to its con­cerns about the doc­u­ments be­fore it were clear­ly show­ing and ask­ing for fur­ther in­for­ma­tion or clar­i­fi­ca­tion, or any mat­ter what­so­ev­er that would have been in keep­ing with their du­ty,” he said.

As part of his judg­ment, Jus­tice Rahim al­so or­dered the for­mer board to pay SporTT’s le­gal costs.

How­ev­er, they will not be re­quired to im­me­di­ate­ly pay the le­gal costs and com­pen­sa­tion, as Jus­tice Rahim grant­ed a 42-day stay of his or­ders to give them time to con­sid­er an ap­peal.

In ad­di­tion to the claim against the for­mer board mem­bers, SporTT al­so pur­sued a breach of con­tract case against eBeam.

In Au­gust last year, High Court Judge Eleanor Don­ald­son-Hon­ey­well re­ject­ed SporTT’s case against eBeam but still or­dered it (eBeam) to pay $30 mil­lion in resti­tu­tion, as she ruled that it was un­just­ly en­riched for ser­vices it did not pro­vide.

While SporTT was seek­ing the en­tire val­ue of the con­tract, Jus­tice Don­ald­son-Hon­ey­well de­duct­ed $4 mil­lion, which rep­re­sent­ed the nom­i­nal ser­vices, in­clu­sive of the pro­cure­ment of equip­ment pro­vid­ed by eBeam.

SporTT was rep­re­sent­ed by Col­in Kan­ga­loo, SC, John Lee and Stephanie Moe.

The group’s lawyers in­clud­ed Fyard Ho­sein, SC, An­tho­ny Vieira, SC, Rishi Dass, SC, Jagdeo Singh, Ka­ri­na Singh, Ke­ston Lewis, Roger Kawals­ingh, Ravi Mungals­ingh, Tara Bhar­ios­ingh, Nicole de Ver­teuil-Milne, Adri­an Ra­moutar, Sush­ma Gopeesingh, Kami­ni Per­saud-Maraj, Neal Bis­nath, Ly­dia Men­don­ca, Richard Ja­gai, An­drea Bhag­wan­deen and Dhar­men­dra Pun­wassee.